John Lahart (Dublin South West, Fianna Fail)
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70. To ask the Minister for Finance if he has considered reducing VAT to 0% on new builds to reduce the cost of construction; and if he will make a statement on the matter. [58225/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate (currently 23% in Ireland), unless they fall within the categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT.

Following amendments to Annex III of the VAT Directive, agreed in April 2022, a limited number of categories within Annex III of the VAT now permit a zero rate.

However it is not possible to apply a zero rate to construction of any kind. Ireland already applies a reduced rate of 13.5% to all construction, including new builds. It is not possible under the VAT Directive to provide separate VAT treatment for new builds in comparison to other forms of residential construction. In addition, there is no obligation for any VAT reduction to be passed to the final consumer.